- Brent is heading for second weekly gain after OPEC+ supply cuts
- Oil Likely to Return to $100 – PVM Analyst
- Biden says US eyeing ‘alternatives’ after OPEC+ cut
- Coming soon: US jobs report
LONDON, Oct 7 (Reuters) – Oil rose on Friday, heading for a second consecutive weekly gain, helped by OPEC+’s decision to implement the biggest supply cut since 2020, despite fears of a recession and rising interest rates.
The cut by the organization of petroleum exporting countries and allies including Russia, known as OPEC+, precedes a European Union embargo on Russian oil and will squeeze supply in an already tight market. Continue reading
Brent crude was up 33 cents, or 0.4%, to $94.75 a barrel at 08:00 GMT. US West Texas Intermediate, or WTI, crude was also up 33 cents, or 0.4%, to $88.78.
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“One of the key implications of the recent OPEC cut is a likely return of $100 in oil,” said Stephen Brennock of oil brokerage PVM. “However, gains will be capped by mounting economic headwinds.”
Both benchmarks are heading for a second weekly gain, with Brent approaching 8% this week. The global benchmark is still sharply lower after nearing an all-time high of $147 a barrel in March following Russia’s invasion of Ukraine.
“With Brent now firmly back in the $90-$100 range, the group is likely to be pleased with the outcome, although there is significant uncertainty about the economic outlook,” brokerage firm OANDA’s Craig Erlam said of OPEC+.
A stronger US dollar
The strength of the dollar makes oil more expensive for other currency holders and weighs on oil and other risky assets.
Investors are looking to the US nonfarm payrolls report, due later Friday, for clues as to how much more US interest rates need to rise.
US President Joe Biden on Thursday expressed disappointment with OPEC+ plans, and he and officials said the United States was exploring all possible alternatives to prevent prices from rising. Continue reading
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Additional reporting by Mohi Narayan; Editing by Jason Neely
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